Tower trials parametric cyclone cover in two Fiji villages

28 November 2022

New Zealand’s Tower Insurance is piloting a cyclone parametric insurance product in Fiji, with a plan to expand the offer to Tonga, Vanuatu and other pacific countries.

Tower’s Cyclone Response Cover provides a rapid cash pay-out when a customer is impacted by a high wind speed cyclone event, regardless of damage and without the need for an insurance assessor’s signoff.

“You are guaranteed to be paid out if a cyclone meets certain criteria in your area, no questions asked, and no insurance assessment needed. We aim to process payments within seven days,” Tower Head of Pacific Digital Distribution Veilawa Rereiwasaliwa said.

Customers of the pilot, launched in collaboration with the United Nations Capital Development Fund, have a choice of three products ranging from $1000 to $3000, depending on the level of cover.

Tower CEO Blair Turnbull says the product may help address underinsurance in the region.

“With less than 10% of pacific families having home insurance, we hope this will address a much-needed gap in the market and help provide economic resilience following a cyclone event,” he said.

It is first being trialled in Ketei Village on Totoya Island and Kavala Village in Kadavu for the current cyclone season. Tower is working with local financial institutions and says Cyclone Response Cover will be available in Fiji for the 2023/2024 season.

Cyclone Yasa caused around F$500 million ($334.13 million) in damage in 2020 and impacted 97,000 people. In 2016, cyclone Winston caused more than F$2 billion ($1.34 billion) damage across 350,000 people.

“Cyclone Response Cover will lessen the burden on local villages and their support networks, enabling them to recover from cyclone damage quickly. Tower is so proud to be launching this product. We’re doing what’s right,” Mr Rereiwasaliwa said.